Only Relying on a 401k for Retirement?

Andover, Massachusetts January 31st, 2011 – Is your entire retirement plan relying on your 401k to fund it? If so, you might be in for a shock when it comes time to retire. While a fully funded ($16,500/year) 401k with a company match is probably enough to cover your retirement needs, the fact of the matter is that only a tiny minority of workers are able to do this. Even if you are in this tiny minority, placing all your eggs in one basket is generally not considered a wise move by retirement planners. So what are your options besides a 401k?

If you are currently contributing to a 401k, continue to do so and work towards maxing out this contribution as you near your retirement date. Always contribute enough to at least get the full matching contribution from your employer if it is offered. Beyond this simple step, there are many other things that you should take into account when planning your retirement funding. Post tax money invested in a Roth IRA is a great tool to add some diversity to your portfolio by allowing you to withdraw your savings tax free after the age of 59 ½. Social security can also be considered another option for most Americans who are already near retirement age (less than 10 years). For us younger generations, social security should not be used when planning your retirement, but if it is still around any amount you get from that will just be a bonus. Beyond this, having a strong, diversified portfolio of investments is critical to accumulate the amount of wealth you will need in retirement. Before you make any decisions in regards to funding your retirement, figure out when you want to retire and how much you will need. These two critical numbers will allow you to devise a funding plan for all your retirement dreams.

Readers, how are you planning for retirement?

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2010 alone Preferred Financial Services reduced over $26.5 million worth of consumer debt for just $10 million, for a savings of about 60%- and over 4,000 accounts were settled on behalf of their clients.

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Contact:
Stephan Tavernini
Marketing Coordinator
Certified IAPDA Debt Arbitrator
Preferred Financial Services
stavernini@pfs1.net